Dhamaka’s fortune seems to be hurtling down the same path as the infamous e-commerce platform
Just like Evaly, merchants and sellers have decided to take legal action against Dhamaka Shopping, a concern of Invariant Telecom Bangladesh Ltd, citing its failure to honour its previous promises of paying up.
They said that they are yet to receive Tk200 crore from the company.
Dhamaka had been popular among digital shoppers as they had reportedly collected large sums of money in advance from customers, luring them through various discounts ranging from 40-50%, similar to Evaly’s campaigns.
With year-long huge discounts and up to 150% cashback offers, Evaly was able to attract a huge number of customers across the country.
But with complaints and irregularities, e-commerce platforms such as Evaly, Dhamaka Shopping, and Eorange soon started garnering criticism and claims of non-payment and delivery.
On September 16, after the arrest of Evaly’s CEO Rassel and Chairperson Shamima Nasrin, his wife, RAB revealed that the platform counts liabilities over Tk1,000 crore.
Dhamaka sellers and merchants' on Saturday held a press conference at Dhaka Reporters Unity in the capital’s Segunbagicha on Saturday.
They said, scores of merchants had been supplying products to the e-commerce company since December 2020 following an agreement of paying them within 10 working days of receiving the delivery order receipt.
However, sellers and merchants are yet to receive payment even though 160 days have passed.
According to the association, Dhamaka owes Tk200 crore to 650 merchants of the e-commerce company, apart from the platform having 100,000 pending deliveries worth Tk100 crore.
Jahangir Alam, president of the association, told reporters that despite repeated dialogues with Dhamaka’s management in attempts to recover the liability, they were unable to meet any of the owners and no solution was provided.
The company's Managing Director Jasim Uddin Chishti has failed to honour his repeated promises of paying up and legal action will be taken if no solutions are provided by the platform in the next five days, said the president of the association.
The sellers and merchants also requested the intervention of Prime Minister Sheikh Hasina regarding the matter.
Earlier the infamous platform’s suppliers had sent a letter to the Commerce Minister Tipu Munshi, seeking his assistance in recovering pending payments worth Tk200 crore from Dhamaka, as well as taking necessary steps to safeguard small and medium entrepreneurs (SMEs.)
The Criminal Investigation Department (CID) of police had also sued the owners of Dhamaka Shopping, earlier this month for laundering around Tk117 crore.
According to an earlier CID investigation, Dhamaka Shopping allegedly transferred more than Tk50 crore — received from customers as advance payments — to bank accounts of its officials and laundered the money out of the country.
Additionally, Tk588 crore worth of transactions remains unexplained by the platform.
The central bank had also frozen 14 personal bank accounts of Dhamaka officials, including the personal bank accounts of its managing director, Jasim Uddin Chishti, for allegedly laundering money.
Several banks, as well as mobile financial service providers, had also cut ties with the platform including Brac Bank and bKash.
Moreover, a CID official, seeking anonymity, told Dhaka Tribune in July that the platform is not registered and does not have a valid license.
Following Evaly’s footsteps
According to Bangladesh Bank sources, in the four months from January to April this year, Dhamaka has collected more than Tk350 crore in orders through such lucrative offers. According to CID sources, Dhamaka has swindled thousands of customers with tempting offers such as “Double Taka Vouchers', 'Signature Cards” and other unusually hefty discounts.
The National Directorate of Consumer Protection (DNCRP) has received complaints from a number of consumers against this online shop.
According to the DNCRP, customers claim settlement rate is less than 20%.
Dhamaka started business in November last year but did not have a business bank account of its own. Instead, it collected money from buyers through private and personal bank accounts.
It collected huge amounts of money in advance payments from consumers luring them with radical discounts amounting to up to 50%, just like Evaly.
Tareq (pseudonym), a consumer of Dhamaka, told Dhaka Tribune that he was disheartened after ordering several thousand of takas' worth of products. At first, his orders were delivered but then, the platform did not deliver Tk20,000 worth of orders made later.
"I ordered from Evaly but did not get my deliveries, so I switched to Dhamaka as they were initially ensuring smooth delivery. I do not know what happened to them all of a sudden that they turned out to be just like Evaly,” he added.
The consumer had lodged no complaints with any authorities as he believed he would not be getting his money back by any means.
Evaly had also lured in customers by offering huge discounts on various products, including cars and motorcycles, and did not deliver. It had also not paid its merchants.
Paperfly, the country’s largest tech-bound logistic network, had also planned to sue Evaly over outstanding payments.
Evaly owes several crores of takas to Paperfly, however, the platform has not settled the Tk7 crore bill since January.
Paperfly was giving door to door delivery service to Evaly for quite some time and was facing a massive challenge in recovering its dues.
An Evaly customer named Arif Baker also brought charges of fraud and issuance of death threats against Rassel and Nasrin in the case filed with the Gulshan police station on Thursday. The duo was arrested from their flat in Mohammadpur after a raid by Rapid Action Battalion (RAB) members.
According to the case statement, the plaintiff noticed Evaly’s advertising in May and made orders worth Tk3.1 lakh from the site. The orders have yet to be fulfilled, long after they were made.
After primary interrogation, RAB claimed to quote Rassel and Nasrin, that Evaly owed more than Tk1,000 crore to its customers and suppliers but had only Tk30 lakh in its bank account.
Rassel had planned to enter the stock market after running his company for three years. He also had planned to declare himself bankrupt after failing to repay the debt, RAB said at a press conference on Friday.
Talking to Dhaka Tribune, company law expert Barrister Tanjib Ul Alam said such business activities of these fraudulent platforms in Bangladesh are deceptive.
“If you ask them what is their fresh investment capital in the business they will say It is null. These e-commerce outlets used public money to grow their businesses, who were their customers. It is not possible for them to operate a sustainable business through the offers campaigns,” he explained.
Alam mentioned that these types of companies know from the beginning that the business model will not be viable and at some point, they have to close shop.
Most of these platforms offer high risk for high returns, a trend started by Evaly.
Asked if Dhamaka is heading down the same path as Evaly, Muhammad Abdul Wahed Tomal, general secretary of the e-commerce Association of Bangladesh (e-CAB), told Dhaka Tribune that these companies have the same business model, so it would not be a surprise if they suffer the same fate.
“Both these companies incurred huge liabilities based on the same model using consumer’s money. They do not have fresh investment capital in the business and with the ongoing reputation the liabilities grew exponentially,” said the Ecab secretary.
It is not possible for them to operate a sustainable business because of the SOP that was introduced. Prior to that, they had been taking advantage of a system that lacked monitoring as well as a framework, taking advance payments and not delivering for months.
“The platforms were issued explanations from the association where they had repeatedly asked for time but did not follow up despite time being given,” Tomal also said.
“The SOP was introduced in the first place so that customers are not taken advantage of. Following the SOP and the introduction of the Escrow system, a lot of the consumers’ money were being held by payment gateways which could be recovered, fortunately,” he added.
However, a lot of the liabilities might not be recoverable, he warned if the businesses are not allowed to operate.
Dhaka Tribune was unable to reach Dhamaka for comments.
DS Sourav also contributed to this report